The past years has encountered increased competition in the business environment due to rise of business organizations that provide more or less similar products and services. As commented by Martínez-López, Gázquez-Abad & Sousa (2013), rise of similar kinds of business organizations has resulted in market saturation thereby, making market penetration difficult. This is where the significant role of marketing comes into action. The use of appropriate marketing technique provides an opportunity for the business organizations to increase the visibility of their brand. In addition to, conducting business in the same country results in market saturation. As the business organizations settle and establish them already, it becomes difficult for them to attract new customers and penetrate new markets. This is when the business organizations aim towards expanding their business internationally.
The use of appropriate marketing techniques allows the business enterprises to develop a long lasting relationship with the target audience by gaining their trust and confidence (Papadopoulos & Heslop, 2014). The use of effective marketing strategies enables the business organizations to gain recognition as well as attention of the target audience across the specific region. As a result, it can be said that the heart of the success of the business organization lies in the marketing strategies used by the business organizations. In addition to, effective and innovative marketing strategies helps the business enterprises to create a loyal customer base.
In order to sustain in the competitive market, it is necessary for the business organizations to attract new customers by penetrating new market segments. As a result, once the business organization has established as well as strengthened them in the home country, they go for international expansion (Stelzner, 2014). Other than attracting new customers and sales maximization, international expansion provides an opportunity for new revenue potential for the business organizations. New revenue potential is highly influenced the marketing strategies developed and implemented by the business organizations. The marketing strategy used at the international platform needs to be unique in order to diversify the market of the company, exposing to foreign investment opportunities and improving the reputation of the company thereby, creating larger customer base (Fan, Lau & Zhao, 2015).
This report introduces about the expansion of MVP Hair in the African market in the male grooming product line. The founder of the product has high hopes with the product, as hair product for the male is still unexplored. MVP Hair operates internationally and sells its products in countries such as Ghana and non-boring countries. However, the company aims towards scaling up their profit and production scale by identifying new promising market along with developing new market entry strategies.
Executive summary
The MVP Hair is a product by SLID Industries Limited established on 1998 by Sandy Osei-Agyeman, is a skin and hair manufacturing and distributing company in Ghana, West Africa. The company’s aim and objectives is to manufacture and distribute skin and hair products under the brand names MVP, LaNe, Family choice and Skin Fine. The skin and hair product is sold in Ghana as well as other African countries such as South Africa, Togo, Nigeria and Ivory Coast (“MVP Hairdressing Products – Always Irresistible”, 2018).
Sandy Osei-Agyeman is one of the founder of AFAM Concept in Chicago, US that are considered as the successful and famous makers of MO’ BODY, ELENTEE and VITALE and has several years of experiences and excellent track record in respect to the hair and skin products. In collaboration with AFAM, MVP Hair has highlighted new concepts in hair care products for the people. The new and successful concepts include “Moisture Retention” and “Never Greasy” (“About Us – MVP Hairdressing Products”, 2018).
AFAM is one of the leaders and pioneers of hair relaxer technology and is supposedly the only company that offers calcium, lithium and sodium relaxers for individual scalp and hair texture. MVP that stands for Most Valuable product is the new creation of SLID Industries Limited that uses the best of both worlds in creating hair care. MVP has been sold in Ghana and other African countries since 1998 (“MVP Hairdressing Products – Always Irresistible”, 2018).
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Strength Combination of organic and chemical product has made them successful Offers product with calcium, sodium and lithium relaxers Offers balanced, functional and innovative hair products MVP products moisturize, condition, revitalize, and repair during all phases of hair care Profit margin have increased since the beginning of 20th century |
Weakness Restricted to Ghana and African countries Restricted to the women sector of the country Lack of capacity Lack of adequate staffs and knowledge about hair |
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Opportunities Aim towards expanding the company by venturing in the male grooming product line Expanding business outside Ghana and Africa High hopes within the existing market Offering moisturizing option for the men hair Huge hair care industry in Ghana and Africa |
Threats Ignorance and casualness among the men in respect to the hair industry in Ghana Venturing into new market Identifying and penetrating new market Margin of error in the hair care business |
Strength: Most Valuable Product (MVP) is one of the recently launched products by SLID Industries Limited that is operating in Ghana and African market since 1998. The product provides the benefits of relaxing and moisturizing of the kinky African hair. The product has been developed by combining the organic and chemical aspects for the hair. The MVP Hair has been developed by considering the natural, herbal and botanical resources of Africa (Yuan, 2013). Thus, it can be said that the product is developed by combining the best of both the world, US and Africa. The product is developed by using calcium, sodium and lithium relaxers that are beneficial for moisturizing the hair. The company has seen increased profit margin since the beginning of the 20th century (Bohari, Hin & Faud, 2017).
Weakness: In addition to the strengths, the company and the hair product has some potential risks. The company is restricted to Ghana and the African countries only such as South Africa, Togo, Nigeria and Ivory Coast. The hair industry in Africa is vast and operating only from specific countries is restricts the opportunity of business expansion. In addition to, lack of adequate staffs with limited knowledge about hair and hair products is also a threat for the MVP Hair. Focusing only on the female population in the country is potential threat, as the company is limiting the exposure and expansion of product in the market (Xingang, Jiaoli & Bei, 2013).
Opportunities: Considering the strengths of the Most Valuable Product in Africa, there are potential opportunities associated with it. One of the opportunities of the MVP Hair is expanding the company towards the male grooming product line. This is because the men in Africa do not pay much attention towards self-grooming (Viaggi, 2013). Dry and unhealthy hair are evident among African men that justifies the opportunity of MVP Hair for men. In addition to, the founder of the company aim towards expanding the product line to all the places in Africa by considering the huge hair care industry (Everett, 2014).
Threats: Based on the identified weakness, the threats of Most Valuable Product (MVP Hair) are the existing ignorance and the casualness among the men population of Ghana and Africa. However, in spite of being the leader and pioneer in the hair product industry, there lies margin of error in the hair care business. Identifying the needs and demands of the new market also highlights potential threats for MVP Hair products (Brooks, Heffner & Henderson, 2014).
From the above conducted SWOT analysis, it can be said that Most Valuable Product (MVP Hair) is one of the creative ventures of SLID Industries Limited that includes organic ingredients while manufacturing the hair product that wants to scale up their production by identifying new promising market as well as developing new market strategy.
Considering the industry the company is operating currently, the founder of the product plans on expanding the company and the product line towards male grooming product line. The founder has high expectations and hopes in terms of the market, as he has been doing business in the market for years and is confident enough in his success. The founder of the product has selected the market because the hair product industry in Africa and Ghana are more women centric and the male population is completely unexplored. This is because the men do not pay much attention in grooming their hair. As a result of not applying moisturizing and using normal hair, the hairs of the men appear unhealthy and dry (Coeurderoy & Murray, 2014).
Thus, making the men population aware about the benefits of applying moisturizer and looking well-groomed is the reason of selecting the men population of the country. The founder of the product aimed towards letting the population know the significance of using two products, shampoo and moisturizer thereby, determining the success of the line. As a result, MVP Hair will be able to scale up their sales (Weinstein, 2013).
This section highlights the PESTLE analysis of Africa in terms of the hair products.
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Political |
Parliamentary republic Presence of higher rate of corruption Slowing down the economic progress and development Frequent occurrence of violence, political intolerance and protests |
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Economic |
It has the 34th largest economy GDP stands for $371 billion. Economy declined in the fourth quarter of 2017 Both national and international companies needs to pay corporate income tax |
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Social |
Higher rate of unemployment Ailing public health system Slower rate of economic growth due to lack of adequate infrastructure Good business opportunities for beauty and cosmetics products along with construction and automotive industry |
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Technological |
Highly technologically advanced company Enormous progress in mobile software Online shopping is on the rise, greater opportunities for online retailers Cyber attacks and issues encountered |
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Legal |
Encourages Foreign Direct Investment Potential restrictions on foreign stakeholders Employees are protected fundamentally Equal rights at workplace due to The Employment Equity Act, 1998 |
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Environmental |
Highly popular tourist destination Abundant wildlife, scenic beauty Environmental challenges in terms of air, water and land pollution and deforestation |
Political: The African Federation is a parliamentary republic due to which the President is the head of the government as well as the state. In order to form the cabinet, the President appoints a Deputy President and the Ministers thereby, administering the state affairs. However, until 1994, it was ruled by apartheid government but post the democratic election 1994, significant changes has been encountered and implemented. The political scenario of Ghana and the South African countries is surrounded and largely affected by the existing corruption (Chabal, 2016). Existence of corruption results in political intolerance, frequent protests and violence thereby, slowing down the economic development and progress of the country. However, the founder of the MVP Hair needs to consider the political scenario, as they are venturing in a new market for scaling up the sales.
Economic: Economic stability of a country highly influences the new venture of business organizations. It is considered as the 34th largest economy in the world in respect to the nominal GDP. In 2018, the GDP stands for $371 billion that increased by 3.1% in the fourth quarter after it declined in the first quarter of the year. In future, the economy of the country is expected grow by 3.7% thereby, giving sufficient opportunities for the business organization while conducting business. Both the national and the international business organizations need to pay corporate tax of flat 28% (Herrero et al., 2014). However, on the contrary, the corporate tax for the smaller business organizations is much lower. On the other hand, special rates for specific industries are also imposed. Furthermore, the income tax rate starts from 18% and goes up to 45% depending upon the income of the individuals. Thus, the founder of the MVP Hair needs to consider the corporate tax as well as the income tax while venturing into the new market and developing the pricing strategy, as they need to incur considerable profit after paying tax (Turner et al., 2015).
Social: Africa is a considered to have a multinational diversity with an estimated 11 different types of local languages. The most followed religion in Africa are Christianity, Islam and other indigenous beliefs. The average life expectancy of the men and women are 53 years and 54 years respectively. Unemployment in Africa is one of the biggest social issues along with ailing public health system, poor society and inadequate infrastructure (Barrientos & Hulme, 2016). As a result, the social mobility and economic growth of the country is slow and is halted. However, the society faces tensions between the local communities and the immigrants. Apart from the challenges, Africa provides suitable business opportunities for beauty and cosmetics sector along with eye care, construction, utility services and automotive sector. The above analysis highlights better and prosperous business opportunities for MVP Hair considering the higher business opportunities of the sector in Africa (Oteros-Rozas et al., 2015).
Technological: Technology is budding and is in great demand in Ghana and other African countries. The government is taking initiatives and steps in order to ensure progress in respect to mobile software and security software. Numerous international software and tech companies have opened their branches in Africa through subsidiaries (Nakafeero et al., 2013). Considering the growing preference of technology, online shopping has also increased thereby, providing greater opportunities for online retailers as well as online promotions. However, on the contrary, cyber attacks and online vulnerabilities have also been encountered. Thus, while promoting MVP Hair, the use of online platform and emerging technology needs to be considered and used by mitigating the cyber attacks for increasing customer base and sales maximization (Rodrik, 2016).
Legal: Africa influences and encourages Foreign Direct Investment in all sectors of the economy in spite of some potential restrictions on the shareholders in specific sectors such as banking, telecommunication, mining and defense. In addition to, due to the The Employment Equity Act 1998, all the employees are protected fundamentally. This Act promotes and facilitates equality at workplace by ensuring fair treatment, behavior and equal opportunities. Thus, MVP Hair needs to consider the Act while doing business in Africa thereby, protecting the employees working for them (Di Minin et al., 2015).
Environmental: Africa is one of the popular tourist destinations in the world due to the existing scenic beauty, forests, wildlife and different traditions and culture. However, the environment of Africa is questioned due to existing issues such as air, water and land pollution, deforestation and land degradation. While conducting business, the founder of MVP Hair needs to ensure that the surrounding environment is not harmed and should include corporate social responsibility while developing business strategy (Chaudhury et al., 2013).
Executive summary
The product needs to be promoted in the Nigerian market so that it can result in increasing the rate of attraction among the customers. This will directly result in increasing the level of profit for the product in the market. The product needs to be marketed in an efficient manner so that it can be visible in the major stores and can be sold through the retailers to the customers. The product can be promoted through different channels such as online and print media. The use of these mediums will increase the rate of attraction of the product in the market (Contzen & Mosler, 2013).
The product can be marketed directly to the consumers by advertising on the television and radio so that they can gain a proper knowledge regarding the features and attributes that are present in the product. The indirect manner of marketing the product with the help of wholesalers and retailers will not be taken up by the company, as it might not create an impact on the customers. This is due to the fact that the retailers and wholesalers have a limited number of customers, which will not create an impact on the sale of the product in a proper manner (Fong, Fang & Luo, 2015).
The company will be trying to promote the products through cheap channels so that it can help in increasing the reach among the customers and the retailers in a better way. Social media promotions will be used to a great extent, as it is the best inbound option of marketing that can be used up by the owners of small businesses. The use of social media will help in attracting more number of potential customers towards the product of the company (Oliveira, 2013). This is due to the fact that most of the people in the recent times are hooked on to sites like Twitter, Facebook and YouTube, which will help in increasing the sale of the product. Blogging is yet another powerful tool that can be used by the company to advertise its product in the market. This is due to the fact that the content of the products are written by regular uses and they have many followers that will be interested in trying out the product as well. The blogs will be done with the help of info graphics so that the customers can get a visual representation of the product and the information regarding the product (Kornfield et al., 2014).
The company will also consider using the email marketing where the messages will be sent to the target audiences personally. The messages will be customized and personal so that it can create an impact on the customers in a proper manner. It will also result in understanding the demographics of the customers by the company and their purchases that they have done earlier. It will also inform the customers the offers and discounts that will be provided to them if they purchase the product on a repetitive manner (Inversini, Cantoni & De Pietro, 2014). This will help in appealing to the customers in a personal manner as well. Another cheaper method of promoting the product by the company is to arrange trade shows so that the products can be showcased and help in increasing the level of interaction among the customers. The funding for these shows can be done with the help of blogging and social media promotions (Almquist, 2014).
The ads that will be given in the social media needs to be budgeted so that it can help the company in maintaining its financial stability.
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Name of Social Media |
No of Advertisements |
Price/ unit ($) |
Total price ($) |
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3 |
150 |
450 |
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5 |
200 |
1000 |
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YouTube |
8 |
500 |
4000 |
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2 |
175 |
350 |
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Total |
18 |
1025 |
5800 |
The ads will be given during a particular video that is being played by the customer in the online platform so that it can help them in getting a reminder regarding the product.
The customers need to be convinced in purchasing the product so that it can result in increasing the level of sales for the company. This will help the company to gain a better rate of share in the market and gain a competitive advantage as well. The advertisement needs to be well formed so that it can provide proper information to the customers regarding the product. This will help in attracting them towards the product. Another method of convincing the customers that the company can take up is that it can give free sample so that they can use it and understand the value of the product in their regular lives. This will also help in increasing the level of sale of the company (Saxton & Waters, 2014).
The main message that the marketing campaign of the company needs to present is the features and attributes of the product that will help in getting their attention. This will result in providing better level of knowledge to the customers regarding the products that are being marketed by the company. The message of the marketing campaign needs to be written in a manner that will help in appealing towards the customers (Richardson et al., 2014). The message should also contain the price of the product so that it can give the customers a proper idea regarding the price at which the competitor companies are selling it. This will help in increasing the competitive advantage of the company in the Nigerian market. The instructions of using the product so that it can deliver the optimum services need to be provided by the company in the marketing campaign so that it can guide the customers in a better manner. This will also increase the level of efficiency of the product in the market (Duchessi & Lauria, 2013).
The slogan for the company will be ‘A Cut above the Rest’, which will directly send a sense of competition to the rival brands operating in the same market. It will also help the customers in gaining better knowledge regarding the type of product that is being provided to them. The use of the product will increase to a great extent as well. The message of the company needs to be aligned with the product so that it can help in providing the necessary information that is needs to sell it in the market (Kim et al., 2016). The use of the conventional media will help in dispersing the messages to the target audience in a proper manner so that it can help in acquiring the target audience. The message of the hair product needs to be aligned with the marketing campaign so that it can gain the highest level of attraction from the customers. This will result in increasing its sales in the market for the company as well (Gangwar, Kumar & Rao, 2013).
The brand name MVP Hair does not need to be changed, as the customers are of the view that MVP stands for Most Valued Product. This will be the Unique Selling Proposition (USP) for the company, as they will give the customers a sense of feeling that the product will value their hair the most. The presentation of the advertisement has to be modified in such a manner so that it can help in appealing to the customers in a visual manner. The company also needs to make sure that the traditions that are present in Nigeria and Ghana are being followed in a proper manner so that it can avoid the controversies of being illicit in the market.
Figure 1: Marketing Brochure
It is important for the business organizations to develop an appropriate market entry strategy followed by selecting the appropriate market entry mode for delivering the product to a target market and distributing them. As mentioned by Gollnhofer & Turkina (2015), the concept of exporting highlights manufacturing the goods in one country but marketing and selling it in another country. However, as argued by Mudambi, Piscitello & Rabbiosi (2014), while exporting, the business organizations need to rely on the host country agents largely. On the other hand, franchising defines the use of business model of a successful business model thereby, providing employment freedom and reduced risk of failing (Johnson, 2013).
As mentioned by Kleiner & Krueger (2013), licensing is defined as the market entry mode in which a country permits a company for using, manufacturing and processing of the licensor. For example, in Zimbabwe, United Bottles have the license of Coca Cola. The collaboration or partnership of two or more investors sharing ownership is defined as joint ventures. It offers risk sharing but recovering the capital is not impossible if required (Tiefenbeck et al., 2013). The concept of wholly owned subsidiary highlights the idea in which a company is owned by another company thereby, owning a subsidiary that is known as the parent company. Online retailing platform enables the companies to sell their product using the online platform and reach out the customers regardless of their location (Lopez-Duarte & Vidal-Suarez, 2013). Also, collaborating with the local distributors is another market entry mode. This is beneficial as the company has the opportunity of including the local people and agents that has better understanding of the environment, the people and how to convince them thereby, up scaling the scales (White III et al., 2014).
Considering the above definitions of the different market entry modes, using the online retailing platform is the most suited market entry mode for MVP Hair. This is because of the various benefits the online platform will be able to provide to SLID Industries Limited. SLID Industries Limited is already conducting its business in Ghana and other African countries thereby, the use of online retail platform will be highly beneficial. As mentioned by Du and Tang (2014), the use of online retail platform helps in expanding the customer reach. As a result, MVP Hair will be channelized to reach out more customers regardless of the time and location. The use of Amazon by SLID Industries Limited for selling MVP Hair will allow the company to communicate the product to all the men in Ghana and African countries as well as sell them. However, on the contrary, the use of online retail platform also helps in providing convenient shopping to the customers. The entire men population in the country will be able to shop MVP Hair according to their convenience such as without even visiting the store physically (Vize et al., 2013).
The SLID Industries Limited has been operating in Ghana and the African countries for years and is considered as the leader and pioneer in the hair and skin products. Also, the promotional strategies using the online platform require less financial resources. As the company is well-established and has a hold in the market, the use of online retail platform is the best method of up scaling the sales by expanding the customer reach and providing them convenient shopping (Fernie & Sparks, 2014). After analyzing the macro-environment, it was seen that technology is a budding sector in the country with improved mobile and software facilities. This also supports and justifies the use of online retail platform increasing the sales of MVP Product. In addition to, the use of online retail platform will also help in creating awareness about the benefits, features and properties about MVP Hair thereby, scaling up the sales (Tzanetakis et al., 2016).
Once entered, it is important for the business organizations to ship the product appropriately to the new market. SLID Industries Limited has selected the online medium for up scaling the sales of MVP Hair in African market. Considering the entry mode selected by the company, the product should be shipped the the end users directly rather than including any distributor in the middle but including the warehouse facility in the middle. As commented by Christopher (2016), exclusion of the distributor provides an opportunity for the business organizations to save additional expenses, as the company has to pay certain amount to the distributors because they are the ones that make the product available to the end users. Thus, SLID Industries Limited has decided not to include any distributor for making MVP Hair available to the end users. MVP Hair will be shipped to the end users directly from the warehouse, once the order is placed in through the online platform.
The different types of shipping options are UPS ground, FedEx Overnight, DHL and USPS. The aforementioned shipping options maintain different properties while delivering the product to the end users. For instance, UPS ground take up to 4-7 business days for delivering the product to the end users thereby, taking an estimated 72 hours for processing and shipping the order. UPS Ground delivers a product to the end users 2.75 days on average. FedEx delivers a product successfully about half day faster that UPS Ground, that is, 2.21 days average. USPS delivers within 1.79 days average thereby, taking the least time among all (Pazirandeh & Jafari, 2013).
Figure 2: Most suitable shipping options
(Source: Reiners & Wood, 2013)
The above figure suggests that USPS Priority Mail is the best shipping option in terms of reliability, time and cost while delivering packages and products to the end customers. USPS Priority Mail deliver product to the end users at much lower rate and within less working hours since placing the order (Dekker et al., 2013). Therefore, SLID Industries Limited can use USPS Priority Mail as the most suited shipping option for delivering MVP Hair to the end customers.
The pricing strategy is another important aspect that determines the success of the business organizations. The price is set by the business organizations with the aim of maximizing the profit by selling the items. The different types of pricing strategies are premium pricing, penetration pricing, economy pricing, price skimming and bundle pricing. As mentioned by Li, Xu and Li (2013), premium pricing is defined as the pricing strategy in which the companies set and charge higher price than their competitors. The companies attract the customers by the name of the brand highlighting that the name of the brand is enough for assuring the quality of the product. On the other hand, penetration pricing enables the companies to set lower price on goods for attracting the potential customers. As a result, the customer gets attracted towards the product, as they get what they want in comparatively less price (Gilmore et al., 2013). Economy pricing is defined as the process of reducing the marketing and production cost thereby, keeping the price low. Price skimming results in setting higher rates at the initial phase but lowers the rate once established. The use of bundle pricing allows the business organizations to sell multiple products for a lower rate compared to the price asked if it was bought individually.
The price of the product will be competitive in nature so that it can help in gaining an advantage in the market. The profit has to be done in such a manner so that it does not attract any competitor towards the market. The underperforming products of the company needs to be identified and modified so that it can give the best possible results. The market needs to be researched by MVP so that it can be analyzed regarding the price that is being offered by the other companies. This will result in understanding the dynamics that are present in the market. The main idea of the company would be to increase the satisfaction level of the customers so that they can become loyal towards the product (Guo et al. 2013).
The price of the product will be kept at $22 so that it can give stiff competition to the companies that are present in the market. The fixed price of the product will be $10 whereas the other $9 will be used up for the promotional activities. The company will be making a profit of $3 per product so that it can continue with its production. The products will be given to the wholesalers at a price of $20 when they are buying around 100 pieces in bulk. This is due to the fact that the wholesalers can also keep a profit margin for the product to be sold in the market (Nagle and Muller 2017).
Conclusion
Thus, in this chapter, it can be concluded that marketing is one of the most significant aspect that determines the overall success of the business organization. Increased competition in the existing market due to rise in similar type of business organization has made the impact of marketing more prominent. The use of appropriate marketing strategies provides an opportunity for the business organizations to strengthen their brand image along with making their presence well-established in the market. SLID Industries Limited aimed towards up scaling the sales of MVP Hair in Ghana and surrounding African countries. In order to up-scale the sales of the product, the company has emphasized and considered on the market, marketing strategies and the management strategies.
From the report, it can also be concluded that MVP Hair has selected to invade the men population of Africa and Ghana in order to up-scale their sales. MVP Hair is a natural and organic relaxer for the female population but the company has encountered market saturation. Thus, one of the best ways to up-scale the sales of the hair product are by making product for the African men. SLID Industries Limited has decided not to include any distributor for making MVP Hair available to the end users. MVP Hair will be shipped to the end users directly from the warehouse, once the order is placed in through the online platform. This will provide an opportunity for the company to save additional expenses they had to give to the distributors, as they were the ones making the product available to the end users. Considering the different types of entry modes available in the market, online retail marketing has also been selected by the company, as this enabled the company to save additional expenses on physical resources. It has been seen that USPS Priority Mail is the best shipping option in terms of reliability, time and cost while delivering packages and products to the end customers. USPS Priority Mail deliver product to the end users at much lower rate and within less working hours since placing the order. Therefore, SLID Industries Limited can use USPS Priority Mail as the most suited shipping option for delivering MVP Hair to the end customers.
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